RPT-INTERVIEW-Payout official set for surge in BP spill claims

May 17, 2013|Reuters

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By Kathy Finn

NEW ORLEANS, May 16 (Reuters) - The deadline for claimsagainst BP Plc in connection with the 2010 Gulf of Mexicooil spill is 11 months away, but the man responsible for payingthe claims said on Thursday he is already bracing for a latesurge in filings.

Patrick Juneau, a Lafayette, Louisiana attorney experiencedin complex litigation, was named by U.S. Judge Carl Barbier lastyear to oversee BP's settlement with the many individuals andfirms who say they were harmed by the spill and its aftermath.

Of 165,877 claims filed as of May 15, his office has found40,970 eligible for payment, with a total value exceeding $3.2billion, he said, adding that the pace of filings from the fivestates covered by the settlement has picked up in recent months.

"It certainly wouldn't surprise me that we'd break the200,000 mark," Juneau told Reuters. He said his office has beencareful about evaluating claims, and expressed frustration at acourt challenge by BP to payments for economic losses tobusinesses harmed by the spill.

The Deepwater Horizon Claims Administration headed by Juneautook over claims processing last spring from Kenneth Feinberg,who had already paid out $6.6 billion under a claims processthat pre-dated the settlement in April 2012.

Juneau said that as the deadline for claims of April 22,2014, approaches, the pace is certain to pick up more. "It'shappened in every case I've been involved in, and there's noreason to believe it would be otherwise in this case," he said.

His New Orleans office now employs more than 1,000 people,and still needs more help to handle the load, he said, notingthat some claims involve "huge business losses that require aton of accounting analysis."

Juneau expressed frustration over a complaint BP filed inBarbier's court in January, which alleged frivolous and"fictitious" claims were being paid because the administratorwas misapplying a formula for calculating eligibility. He notedthat the office has denied about 16 percent of the claims filed.

After Barbier upheld Juneau's administration, BP said itwould appeal the matter to the Fifth Circuit Court of Appeals,which agreed to an expedited appeal process.

Juneau noted that BP lawyers raised no objections to termsof the settlement when it was first considered by the court.

Before starting the claims process, Juneau said he and histeam reviewed many procedural questions with lawyers for BP andthe plaintiffs to ensure they all agreed on how claims would beanalyzed. He said formulas in the agreement were designed totake subjective considerations out of the process and ensureclaims would be decided based on quantifiable economic factors.

"Nobody anticipated - ever - a controversy like this," hesaid, though he acknowledged it was "very unusual" that BPsigned the agreement despite the fact it did not cap the dollarvalue of claims.

BP set aside about $8 billion to cover the settlement, buthas expressed concern about the escalating "business economicloss" payments, and has even asked the UK government tointervene, according to the BBC.

While claims run the gamut from seafood losses to propertydamage, business economic losses are the costliest category:More than $1.7 billion have been deemed eligible for payment sofar, and Juneau said the pace picked up the last three months.

He believed this was because businesses well north of theGulf Coast but within the boundaries of states designated by thesettlement only recently realized they may have eligible claims.

"The requirements (for filing) get more difficult thefarther away you live from the coast, but the entire states" arecovered by the settlement, he said.

Juneau, who reports to the district court, says he is inconstant contact with Barbier, who is hearing the broader trialcovering the spill.

Noting the trial's first phase wrapped up faster thanexpected, he said Barbier has shown he's determined to keep thecase on a fast track. "I'm just trying to match that attitude,and thus far I think we've pretty well done that," Juneau said.

At age 75 and with decades of handling big cases behind him,Juneau said what drew him to accept his role was its size.

"I knew the magnitude of this thing," he said. "There'snever been a case this big in the history of the United States... it's my chance to put my mark on history."